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Old 05-03-2015, 07:34 AM
 
Location: RVA
2,284 posts, read 1,360,234 times
Reputation: 4939

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I had this same arguement with my 52yo brother, who lost his high dollar $275k job, and has 22 months severance pay. He has a house with a $5k/mo payment and owes around $700k, I estimate. He actually went one step further off the wrong end, and cashed in his 401k in order to BUILD a "smaller" house that will "only" cost $400k to build. It is very highly doubtful that he will EVER get that kind of job again, since he doesnt have a degree. His mlogic was the 10% penalty and taxes are a wash because of the employer contributions!!!

I didn't know what to say except "Good Luck"!!!
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Old 05-03-2015, 08:21 AM
Status: "5 seconds from my next banning" (set 11 days ago)
 
Location: Central IL
16,087 posts, read 9,365,065 times
Reputation: 38047
Totally agree that your retirement money is just that and should not be used for your mortgage.

Get over your psychological issue around the mortgage stopping you from saving. Did you buy too big of a house for your budget? Then consider selling and getting a much smaller house. Otherwise set up an automatic withdrawal to add at least $100 dollars to your retirement account each month - set it and forget it!
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Old 05-03-2015, 09:04 AM
 
Location: RVA
2,284 posts, read 1,360,234 times
Reputation: 4939
A mortgage at todays rates for 100k is only around $620 with taxes & without PMI. If he has trouble with that, then saving an extra $100 a month is a stretch.
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Old 05-03-2015, 10:14 AM
 
5,502 posts, read 6,804,020 times
Reputation: 10888
Quote:
Originally Posted by mathjak107 View Post
personally trying to live like a pauper doesn't sound like a game i would want to play.
agree. I tried this for my first year of retirement to see how it was. as in the frugal lifestyle/shoestring thread. I did not like and decided you have to have a life too. knowing that if I lived in a lower COL area it might be more palatable.
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Old 05-03-2015, 10:26 AM
 
Location: Near a river
16,042 posts, read 19,408,966 times
Reputation: 15677
Quote:
Originally Posted by Perryinva View Post
A mortgage at todays rates for 100k is only around $620 with taxes & without PMI. If he has trouble with that, then saving an extra $100 a month is a stretch.
I regularly take all the pocket and jar change and put it in the paper coin holders. One to two week's worth can be $10–$20. At the end of the month, after paying all the bills, add in whatever's left over, along with the $2/day for not having coffee out (or $10/day for lunch out), and $100 is not a stretch. In the OP's situation, I would not touch the retirement money, but use that $100+/mo to make one or two extra mortgage payments per year. For incentive (and to avoid temptation), don't bank it, put it in an envelope in the safe. He's young enough to have it paid way down before 65.
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Old 05-03-2015, 10:27 AM
 
Location: Near a river
16,042 posts, read 19,408,966 times
Reputation: 15677
Quote:
Originally Posted by mathjak107 View Post
personally trying to live like a pauper doesn't sound like a game i would want to play.
Very few if any on this board would live like a pauper just by tightening their belts a little.
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Old 05-03-2015, 10:41 AM
 
3,805 posts, read 9,813,541 times
Reputation: 7430
We lived on our retirement income for several years to see how we would do. It became a habit and no, we dont feel deprived. We found other cheaper things to do, volunteer for social needs, eat at home, and stop trying to live like the Jones'.

I guarantee that there are very few on here that could not tighten their belt and save a Starbucks or two every day.

It all depends on what your goals are and what you are willing to invest to get to them. My goal was a safe and secure retirement. I worked a job for 31 years, that so many told me I was stupid to keep working at, to get the pension and health insurance. I used a balanced approach to spending, investment, and saving. Not too much of one or the other. Kept careful track of spending and made rational decisions about each $$. Now retired, safe, secure and happy.

Like I said, it all depends on how much you want your goals.
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Old 05-03-2015, 12:14 PM
 
Location: DMV Area/NYC/Honolulu
14,476 posts, read 7,237,569 times
Reputation: 14039
When I read these "my home" threads (regarding debt owed on the house), which make me believe that that the OP is referring to a single-family home, I can never understand why more people aren't looking into buying multiple family homes for rent help from tenants, etc. Yes, I understand that being a landlord is hard work, but my response is that being a homeowner is also hard work regardless. At least make some money off of things
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Old 05-03-2015, 03:58 PM
 
9,350 posts, read 5,471,434 times
Reputation: 10704
Quote:
Originally Posted by Perryinva View Post
A mortgage at todays rates for 100k is only around $620 with taxes & without PMI. If he has trouble with that, then saving an extra $100 a month is a stretch.
That's for a 100k mortgage. For all we know, the mortgage was 500k when it originated.
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Old 05-03-2015, 03:59 PM
 
75,917 posts, read 75,344,236 times
Reputation: 53216
Quote:
Originally Posted by newenglandgirl View Post
Very few if any on this board would live like a pauper just by tightening their belts a little.
that isn't what the poster proposed. they said to make it a game to see how little you can live on.
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